We thought Jon Hilsenrath would break the news of QE3. To our shock, it comes from the only sensible man at the Fed, Kansas Fed's Tom Hoenig.Per Reuters: "The Federal Reserve could debate extending its bond-buying program beyond June if U.S. economic data prove weaker than policymakers expect, Kansas City Fed President Thomas Hoenig said. Another round of bond buying "may get discussed" if the numbers look "disappointing," Hoenig told Market News International in an interview published on Tuesday." May we suggest in that case that Joe LaVorgna stop blaming every herpes outbreak in the US on snow and instead indicate that shit is once again hitting the fan. Obviously, this is merely a scheme to keep the market well bid no matter how violent the revolutionary images on TV, brought upon precisely by this genocidal policy. Even more obviously, it means that oil is going to $200 on short notice.

2. After the propaganda speech of Obama back to the bloody truth that we are still in a depression although they called even the recession off officially.

Much has been said about Bernanke's wealth effect and how it impacts a whopping 1% of the US population (traditionally, those very same bail out recipients who would be insolvent had Gen Ben not rescued the entire financial system at the expense of the DXY, which at last check was below 77 again). Unfortunately, a little less time has been spent discussing the equal and opposite effect: that of the poverty effect. Luckily, every month we get an update on this just as useful metric. And as of November, the SNAP program had 43.6 million participants, an increase of 400k from October, and a 14% increase, or 5.3 million from a year prior. We are confident that this 15% of the US population will be delighted to know that their rapidly diminishing dollars will end up acquiring increasingly less and less stuff.

3. Some truth about US foreign policy from an insider

excerpt

Former Director of the CIA’s Counter-Terrorism Center: American Policy in the Middle East is Failing Because the U.S. Doesn't Believe in Democracy

Robert Grenier - a 27-year veteran of the CIA’s Clandestine Service, and Director of the CIA’s Counter-Terrorism Center from 2004 to 2006 - writestoday:

Events in the Middle East have slipped away from us. Having long since opted in favour of political stability over the risks and uncertainties of democracy, having told ourselves that the people of the region are not ready to shoulder the burdens of freedom, having stressed that the necessary underpinnings of self-government go well beyond mere elections, suddenly the US has nothing it can credibly say as people take to the streets to try to seize control of their collective destiny.

***

Our words betray us. US spokesmen stress the protesters' desire for jobs and for economic opportunity, as though that were the full extent of their aspirations. They entreat the wobbling, repressive governments in the region to "respect civil society", and the right of the people to protest peacefully, as though these thoroughly discredited autocrats were actually capable of reform.

They urge calm and restraint. One listens in vain, however, for a ringing endorsement of freedom, or for a statement of encouragement to those willing to risk everything to assert their rights and their human dignity - values which the US nominally regards as universal.

***

There are two things which must be stressed in this regard.

The first is the extent to which successive US administrations have consistently betrayed a lack of faith in the efficacy of America's democratic creed, the extent to which the US government has denied the essentially moderating influence of democratic accountability to the people, whether in Algeria in 1992 or in Palestine in 2006.

The failure of the US to uphold its stated commitment to democratic values therefore goes beyond a simple surface hypocrisy, beyond the exigencies of great-power interests, to suggest a fundamental lack of belief in democracy as a means of promoting enlightened, long-term US interests in peace and stability.

***

The US's entire frame of reference in the region is hopelessly outdated, and no longer has meaning: As if the street protesters in Tunis and Cairo could possibly care what the US thinks or says; as if the political and economic reform which president Obama stubbornly urges on Mubarak while Cairo burns could possibly satisfy those risking their lives to overcome nearly three decades of his repression; as if the two-state solution in Palestine for which the US has so thoroughly compromised itself, and for whose support the US administration still praises Mubarak, has even the slightest hope of realisation; as if the exercise in brutal and demeaning collective punishment inflicted upon Gaza, and for whose enforcement the US, again, still credits Mubarak could possibly produce a decent or just outcome; as if the US refusal to deal with Hezbollah as anything but a terrorist organisation bore any relation to current political realities in the Levant.

Machiavelli once wrote that princes should see to it that they are either respected or feared; what they must avoid at all cost is to be despised. To have made itself despised as irrelevant: That is the legacy of US faithlessness and wilful blindness in the Middle East.

The fact that the former head of counter-terrorism laments America's failure to support democracy in the Middle East proves once again that U.S. policy is not justified by terror concerns.

As I've repeatedly pointed out, stopping terrorism has never been the primary goal of America's policy towards the Middle East. For example, as Inoted last year:

Starting right after 9/11 -- at the latest -- the goal has always been to create "regime change" and instability in Iraq, Iran, Syria, Libya, Sudan, Somalia, Lebanon and other countries. As American historian, investigative journalist and policy analyst Gareth Porter writes in the Asia Times:

Three weeks after the September 11, 2001, terror attacks, former US defense secretary Donald Rumsfeld established an official military objective of not only removing the Saddam Hussein regime by force but overturning the regime in Iran, as well as in Syria and four other countries in the Middle East, according to a document quoted extensively in then-under secretary of defense for policy Douglas Feith's recently published account of the Iraq war decisions. Feith's account further indicates that this aggressive aim of remaking the map of the Middle East by military force and the threat of force was supported explicitly by the country's top military leaders.

Feith's book, War and Decision, released last month, provides excerpts of the paper Rumsfeld sent to President George W Bush on September 30, 2001, calling for the administration to focus not on taking down Osama bin Laden's al-Qaeda network but on the aim of establishing "new regimes" in a series of states...

***

General Wesley Clark, who commanded the North Atlantic Treaty Organization bombing campaign in the Kosovo war, recalls in his 2003 book Winning Modern Wars being told by a friend in the Pentagon in November 2001 that the list of states that Rumsfeld and deputy secretary of defense Paul Wolfowitz wanted to take down included Iraq, Iran, Syria, Libya, Sudan and Somalia [and Lebanon].

***

When this writer asked Feith . . . which of the six regimes on the Clark list were included in the Rumsfeld paper, he replied, "All of them."

***

The Defense Department guidance document made it clear that US military aims in regard to those states would go well beyond any ties to terrorism. The document said the Defense Department would also seek to isolate and weaken those states and to "disrupt, damage or destroy" their military capacities - not necessarily limited to weapons of mass destruction (WMD).

Indeed, the goal seems to have more to do with being a superpower (i.e. an empire) than stopping terrorism.

As Porter writes:

After the bombing of two US embassies in East Africa [in 1998] by al-Qaeda operatives, State Department counter-terrorism official Michael Sheehan proposed supporting the anti-Taliban Northern Alliance in Afghanistan against bin Laden's sponsor, the Taliban regime. However, senior US military leaders "refused to consider it", according to a 2004 account by Richard H Shultz, Junior, a military specialist at Tufts University.

A senior officer on the Joint Staff told State Department counter-terrorism director Sheehan he had heard terrorist strikes characterized more than once by colleagues as a "small price to pay for being a superpower".

And recall that former U.S. National Security Adviser (and top foreign policy advisor) Zbigniew Brzezinski told the Senate that the war on terror is "a mythical historical narrative".Indeed, one of the country's top counter-terrorism experts, former number 2 counter-terrorism expert at the State Department (Terry Arnold - who I've interviewed twice), has repeatedly pointed out that bombing civilians in Afghanistan is creating many more terrorists than it is removing.

In fact, the top security experts - conservative hawks and liberal doves alike - agree that waging war in the Middle East weakens national security and increases terrorism. See this, this, this, this, this, this and this.